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Behind the Curtains of Privacy Calculus on Social Networking Sites: The Study of
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 Behind the Curtains of Privacy Calculus on Social
Networking Sites: The Study of Germany and the USA
Hanna Krasnova
Humboldt-Universität zu Berlin
Spandauer Straße 1
10178 Berlin, Germany
+49 30 2093-5742
krasnovh@wiwi.hu-berlin.de
ABSTRACT
As social networking sites (SNSs) become increasingly global,
the issues of cultural differences in participation patterns become
acute. However, current research offers only limited insights into
the role of culture behind SNS usage. Aiming to fill this gap, this
study adopts a ‘privacy calculus’ perspective to study the
differences between German and American SNS users. Results of
structural equation modeling and multi-group analysis reveal
distinct variability in the cognitive patterns of American and
German subjects. We contribute to the theory by rejecting the
universal nature of privacy-calculus processes. From a practical
standpoint, our results signal that SNS providers cannot rely on
the “proven” means in ensuring user participation when crossing
geographic boundaries. When financial means are limited, SNS
providers should direct their investments into enhancing platform
enjoyment and granting users with more control and,
paradoxically, lobbying for more legalistic safeguards of user
privacy.
Keywords
Social Networking Sites, Self-Disclosure, Privacy, Trust, Culture.
1. INTRODUCTION
Social Networking Sites (SNSs) have become an inseparable part
of daily online routines for millions of people. Web analytics
companies, like Alexa.com, report that SNSs top the website
traffic charts all over the world, thus, pointing to the ubiquitous
nature of social networking (SN). Despite this global popularity,
the business of SNS providers is far from being easy. Recruitment
10th International Conference on Wirtschaftsinformatik,
16th - 18th February 2011, Zurich, Switzerland
891
Natasha F. Veltri
University of Tampa
401 W. Kennedy Blvd.
Tampa, FL 33606, USA
+1 813 257-3970
veltri@ut.edu
of new users as well as retention of existing ones presents a major
challenge. Having reached maturity in their home countries, SNS
providers increasingly rely on internationalization strategies in
their pursuit for growth. For example, Facebook (FB) offers more
than 70 translations of its site [10].
This growth strategy, however, is plagued by numerous
complexities. When expanding internationally SNS providers
have to contend with local rivals. Thus, FB is competing for new
members alongside Skyrock in France, Vkontakte in Russia and
StudiVZ in Germany. While local SNSs boast first-hand
knowledge of their home markets, international platforms like FB
are challenged to adopt their platform design, communication
strategy and image to national peculiarities.
Given the global nature of users and providers [10] it is crucial to
identify, understand and bridge cultural differences in SNS usage.
Despite importance of this research question for practice, the
literature exploring the moderating influence of culture in the
SNS context is largely absent. Filling this gap, our study
examines the cultural differences between German and American
participants of SNSs. German market is currently dominated by
two major players: local StudiVZ and a late entrant FB. In this
head-to-head competition for user attention, both platforms have
significant advantages on their side: whereas FB is the world
leader in SN services, excelling in innovation; StudiVZ has
insight into the specific needs of German users.
Building on existing theoretical insights regarding the motivation
to use and communicate on SNSs, we propose a theoretical model
of SNS participation. Exploring privacy calculus in intercultural
setting we examine the moderating effect of culture on construct
relationships in our model. Our hypotheses aim to reveal practical
insights into the motivational dynamics behind SNS usage. A
resulting structural equation model is then tested with American
and German FB users. Implications of our results for theory and
practice conclude the paper. On the policy side, we expect to offer
relevant insights for policy-makers who are interested in
protecting the privacy of online users while retaining the
unprecedented potential of SNSs to build social capital.
2. RESEARCH MODEL
Krasnova et al. [24] argue that supporting interpersonal
communication on the SNS platform is key to user recruitment
and retention. Without ongoing communication, network content
becomes outdated, leading to decreased user interest and
immersion and, as a consequence, lost user loyalty. Beyond
ensuring involvement, user self-disclosure is also crucial for
financial sustainability of SNSs. Even though advertisers are
willing to pay for this large database of potential customers, their
interest is contingent on active participation. Indeed, freshly
updated user content offers advertisers unlimited opportunities for
personalization, customer segmentation and market research.
Consequently, in order to remain competitive SNS providers must
do their best to motivate SNS users to communicate and self-
disclose on their platform, and do so frequently. This task,
however, becomes increasingly complex when operating in a
foreign market. As culture determines the way users behave [15],
SNS providers need a deeper understanding of the intercultural
dynamics of individual self-disclosure.
In the past, researchers have applied a variety of theories to
explain the factors behind individual adoption of IT. Theories of
Reasoned Action, Planned Behaviour, Technology Acceptance
Model, Diffusion of Innovations Theory and Social Cognitive
Theory have been frequently used to examine usage intensity in a
variety of settings. As participation of SNSs is associated with
numerous privacy risks, a number of studies advocate the use of
the ‘privacy calculus’ (‘PC’) perspective when investigating self-
disclosure on SNSs (e.g. [24]). In line with this theory, online
self-disclosure is a product of partially conflicting beliefs, such as
expected benefits, privacy concerns and trusting beliefs [8]. Based
on this view, Krasnova and Veltri [25] propose an extended
model of ‘PC’ on SNSs particularly adopted for the purposes of
intercultural research. Even though their work provides a sound
comparative analysis of the means of the model-relevant
constructs for German and American SNS users in their sample,
the authors leave validation of their empirical model for future
work. We pick up this recommendation and adopt their model for
the purposes of our study. As our study is dictated by practical
considerations, only constructs of immediate relevance for SNS
providers and policy-makers are included in the model (Figure 1).
We integrate beliefs regarding Enjoyment, Privacy Concerns, and
Trust in SNS Provider as three independent forces defining the
dynamics of ‘PC’ on SNSs. In order to supply SNS providers and
policy-makers with insights on how these components of ‘PC’ can
be leveraged in different cultures, we extend our model with three
practice- and policy- relevant antecedents: Legal Assurance,
Perceived Control and Knowledge. The reasoning behind the
hypothesized relationships as well as their interaction with
various cultural dimensions is explained in the following sections.
Legal Assurance Enjoyment
Perceived
Control
Privacy Concerns Self-disclosure
Trust in SNS
Knowledge
Provider
Figure 1. Research Model.
3. PRIVACY CALCULUS IN AN
INTERCULTURAL SETTING
Rooted in values, beliefs and traditions, national culture
permeates the way people interpret and behave in various
892
situations. It is therefore natural to expect that cultural norms will
influence such daily activities as SN online [28].
Even though a multitude of studies address the differences in
culture, a framework by Hofstede [15] has received widespread
acceptance. Based on Hofstede’s national culture indices there are
several similarities as well as differences between the German and
US cultures. Whereas both cultures exhibit low power distance
(PDI), low long-term orientation (LTO) and high masculinity
(MAS), they have significant differences in the dimensions of
individualism (IDV) and uncertainty avoidance (UAI). As
Germans are significantly lower on IDV scale, they are likely to
be more interdependent, group-oriented, show higher loyalty to
other people and institutions, as well as suppress their emotions
and behaviour. On the other hand, high-IDV Americans are
characterized by higher self-reliance, competitiveness, hedonic
attitudes and emotional distance from in-groups [47].
Furthermore, due to higher UAI, Germans are expected to be
more risk-averse, feel threatened by uncertain conditions, exhibit
strong faith in institutions and prefer the tried and tested ways
over new methods [9]. Overall, numerous studies confirm the
leading role of IDV and UAI dimensions as major explanatory
variables in a variety of settings (e.g. online shopping) [6, 28].
Hence, in the context of our study we pay particular attention to
these dimensions, when discussing moderating effects of culture
on the relationships embedded in our model.
4. RESEARCH HYPOTHESES
Before proceeding, it is important to note that even though
subsequent analysis is based on a thorough examination of
literature, complexity of cultural influence makes our hypotheses
only exploratory in nature.
Enjoyment: A multitude of benefits, such as self-presentation,
convenience of social interaction, relationship building, may
motivate users to self-disclose on a SNS [24]. Despite their
diversity, all these motives have one common denominator:
enjoyment. Indeed, based on the findings from social psychology,
pleasure can be viewed as a “consequence of gratification of a
motive” ([40] p. 183). For example, Muniz and O’Guinn [34]
demonstrate that conversations in the Internet communities are a
pleasurable experience for participants. Furthermore, Rosen and
Sherman [43] describe SNSs as purely hedonic platforms. Taking
into account the leisure-oriented character of SNS platforms, we
integrate enjoyment as a positive determinant of self-disclosure on
SNSs as depicted in Figure 1.
Overall, SNS providers have long ago acknowledged the role of
pleasant experiences as a crucial part of their competitive
strategies. Evidently, the satisfaction of users’ desire for fun was
the main objective of FB when introducing the News Feed or
opening up its platform to third-party developers. As our study
aims to deliver practical insights, exploring the role of enjoyment
in motivating user communication from an intercultural
standpoint is important.
Overall, the impact of cultural dimensions on the relationship
between enjoyment and self-disclosure is characterized by high
complexity. On the one hand, we expect Germans, as a more
collectivistic culture, to value in-group interaction and thus enjoy
disclosing their information on SNSs as part of group
communication process. On the other hand, pleasure-seeking and
hedonism constitute one of the major traits of individualistic
cultures (like the USA), where people are also more likely to
align their behaviour with their own needs and priorities [7, 47].
Besides, it is important to note that both cultures exhibit very low
levels of LTO, which implies strong preference for short-term
gains as opposed to delayed gratification and forward thinking
[15]. As disclosure of information is usually associated with quick
reaction from others (e.g. commenting / liking one’s status),
which in most cases leads to a pleasurable experience, it is
plausible to assume that German and American users will be
equally encouraged to self-disclose as a result of their anticipated
benefits. We therefore hypothesize that:
Hypothesis 1a: The positive relationship between perceived
Enjoyment and Self-disclosure will not differ significantly for US
and German SNS users.
Privacy Concerns: It is a widespread belief that participation on
SNSs is associated with significant privacy risks. Indeed, a
seemingly innocent piece of information published online may
prove to be a career-killer several years later. Employers, law
enforcement, tax authorities, creditors, and military recruitment
agencies are increasingly relying on SNSs to investigate their
clientele. Just recently, a medical insurance company stopped
sick-leave payments for their depressed client based on the FB
photos depicting her as “happy” [2].
In their attempt to capitalize on privacy concerns of SNS users,
providers increasingly integrate privacy-related claims into their
web-sites and PR campaigns [3]. Whether or not this strategy will
pay off in every country is, however, unclear. On the one hand,
the relationship between privacy concerns and self-disclosure is
expected to be strongly negative. However, empirical results
provide a mixed picture: whereas a German-based study of
Krasnova et al. [24] finds user privacy concerns to be a significant
impediment to information sharing on SNSs, a study by Acquisti
and Gross [1] finds a discrepancy between claimed privacy
concerns and disclosure behaviour for the US respondents. These
inconsistencies indicate that the strength of the negative
relationship between privacy concerns and self-disclosure is still
to be examined in an intercultural setting.
Lim et al. [28] suggest that both UAI and IDV play a significant
role in the formation of risk attitudes. People from high-UAI
countries have lower tolerance for uncertainty, feel more
threatened by ambiguous situations, and perceive more anxiety
about the future [15]. As a result, they are likely to be more
apprehensive about the consequences of their self-disclosure
behaviour. In general, empirical evidence supports a positive link
between UAI and the impact of risk perception on the subsequent
behaviour. For example, Park [35] finds a positive link between
UAI/IDV and insurance penetration on a country-level, hinting
that risk-averse individuals are more keen on seeking ways to
relieve their anxiety. Similarly, strongly reducing their self-
disclosure is a likely response to privacy concerns by people from
high-UAI cultures like Germany.
Even though IDV may also play a role in the formation of privacy
concerns, the role of this cultural dimension is ambiguous. On the
one hand, because individualistic societies are typically very
competitive as well as opportunistic, SNS users may be more
conscious about the sensitivity of the information they publish
893
online, as it can be used to damage their reputation or careers. In
support of this argument, Dinev et al. [6] find a stronger impact of
Privacy Concerns on the use of e-commerce for the US as
opposed to Italian subjects. On the other hand, collectivistic
cultures are more likely to be anxious about the consequences of
their self-disclosures. Indeed, public mockery of one’s postings
by outsiders may lead to the so much feared “loss of social face”
in the in-group [33].
Investigating interaction of UAI and IDV in the context of risk
perceptions, Lim et al. [28] show that for countries with relatively
high uncertainty avoidance levels, as is the case for Germany,
IDV dimension shows little impact on Internet shopping.
Acknowledging the leading role of UAI in defining the role of
risk perceptions in user behaviour we hypothesize that:
Hypothesis 1b: The negative relationship between Privacy
Concerns and Self-disclosure will be stronger for German users
than for US users.
Trust in SNS Provider: Trust is a central construct whenever
relationships between parties involve some degree of risk or
uncertainty. Whereas trust does not necessarily lead to the
elimination of risk beliefs, it can overrule their negative impact on
self-disclosure [8]. This is consistent with the threshold model
which suggests that formation of trust is independent of risk
beliefs. Once the level of trust has exceeded the threshold of
perceived risk, the trustor will engage in a risky behaviour [12]. In
this respect, trust in the network may be the key to explaining the
dichotomy between expressed attitudes and actual behaviour of
the American SNS users [1].
In the SNS context, authors differentiate between Trust in SNS
Provider and Trust in SNS Members (e.g. [24]). Given practical
considerations, in this study we concentrate exclusively on Trust
in SNS Provider, which we conceptualize as a set of individual
beliefs regarding provider’s benevolence and integrity. Even
though studies from various contexts confirm the positive impact
of trust on individual willingness to self-disclose (see [24]), the
strength of this influence is likely to be defined by cultural norms
[25].
Lim et al. [28] argue that particularly IDV and UAI dimensions
are likely to affect individual willingness to engage in risky
transactions, which constitutes the basis for trusting intentions.
People from high-UAI cultures (like Germany) are likely to be
more pessimistic about the incentives of companies, including
SNS providers [15]. Because they are afraid of becoming
vulnerable to the other party in a transaction, they are also less
likely to take a “leap of faith” and actually act on the basis of
trust. On the other hand, people from the low-UAI cultures (like
the USA) may place less emphasis on privacy concerns and rather
concentrate on collecting evidence of the trustworthiness of the
other party. As a result, they are more likely to engage in a risk-
taking behaviour on the basis of trust [9].
Furthermore, most authors hold IDV as more favourable for trust-
based behaviour. For example, Dinev et al. [6] argue that
members of collectivistic cultures strongly differentiate between
in- and out-group members when developing trust. Hence, it is
unlikely that Germans will exhibit higher readiness than
Americans to make themselves vulnerable to socially- and
geographically-distant FB (e.g. translate their trusting beliefs into
trusting intentions and then into behaviour [9]).
Furthermore, differences in IDV dimension trigger distinct
mechanisms in the trust-formation process. Whereas collectivists
(1) concentrate on predictability of future actions of the trustee,
(2) look for cues that the trustee will act in their best interests
(benevolence) as well as (3) easily transfer trust from one to
another within their group; individualists primarily (1) calculate
the costs and benefits of the defection behaviour of the trustee as
the basis of trust [9]. Analysing these differences in the trust-
formation patterns in the context of online shopping, Lim et al.
([28], p. 549) argue that as predictive trust is more difficult to
develop “Internet shopping is more appealing to individualists
than to collectivists”. In the SNS context, more collectivistic
German users may also find it hard to form sound predictions
about the future behaviour of the US-based FB. The transference
process is also complicated by the controversy of messages
present in the German society: while some may admire FB for its
structured website design, others scorn it for carelessness in
handling user privacy [4]. This complexity of the situation is,
however, conducive to the individualistic formation of trust on the
basis of calculative thinking. Thus, high-IDV American users may
figure that SNS providers have more to lose than to gain by
violating their privacy: Once privacy abuse comes to surface,
SNS provider will have to deal with ruthless media criticism,
stalling user numbers, decreased communication, and even
expensive lawsuits. Summarising, trust is expected to play a
higher role in the decision-making process of high-IDV cultures.
Therefore, we hypothesize that:
Hypothesis 1c: The positive relationship between Trust in SNS
Provider and Self-disclosure will be stronger for US than for
German SNS users.
As discussed above, three major forces are critical for the
individual disclosure online: platform enjoyment, privacy
concerns, and trust in SNS provider. From a practical standpoint,
however, our analysis will not be complete without understanding
of how the development of these ‘PC’-relevant perceptions can be
managed. On the policy side, legal assurance may impact the
dynamics of ‘PC’ decisions. On the managerial level, enabling
users with control over their privacy as well as informing them
about the essence of the adopted information-handling practices
(knowledge) represent two interrelated strategies of addressing
individual perceptions. We therefore integrate them as positive
antecedents of our ‘PC’-variables as depicted in Figure 1 and
discussed below.
Legal Assurance: As perceptions regarding benefits, privacy
risks and trusting beliefs are situational, they are likely to be
influenced by the institutional structures inherent in the
environment in which SN services are consumed [32]. Indeed,
when engaging into such risky behaviour as self-disclosure, users
are likely to rely on legal structures - privacy-related laws, formal
policies and procedures – which are designed to give them
confidence that things will go well.
By and large, IS-researchers agree that sound legal framework
may help to create an atmosphere of trust on the platform. In
particular, when a relationship is associated with numerous risks –
as is the case for SNSs - the legal mechanisms may work to create
a much needed “trust infrastructure”. Furthermore, in the absence
894
of obvious means to control the use of personal data by providers,
legal assurances are likely to be the best solution to privacy
concerns [30]. Finally, by setting the rules of the ‘privacy game’,
law-makers ensure that users feel at ease releasing their personal
information on a SNS. This, in turn, is likely to allow them to
gain the benefits of relationship maintenance, self-presentation
and, above all, enjoyment. Hence, it comes as no surprise that
SNS providers are increasingly relying on third party seals to
signal their compliance with the required standards.
As perceptions regarding legal assurance are likely to motivate
the development of trusting beliefs and enjoyment as well as
mitigate privacy concerns, the strength of their impact is likely to
differ from country to country.
People in risk-averse cultures like Germany are likely to exhibit
“…higher needs for structure (i.e., formal rules and regulations),
and stronger faith in institutions (e.g., the government)” ([28], p.
547). By establishing protective norms and rules, these cultures
are trying to minimize their risk-related anxiety [7]. Significant
differences in privacy regulation between Germany and the USA
provide support for the validity of this argument. While
Americans leave numerous privacy aspects to industry self-
regulation, Germans have a comprehensive legal framework
covering multiple aspects of personal data access, collection and
use. We argue that as risk-averse cultures attach greater
importance to rules and standards, these legal assurances will also
play a bigger role in the formation of beliefs relevant for ‘PC’.
We hypothesize that:
Hypothesis 2a: The positive relationship between perceptions
regarding Legal Assurances and Enjoyment will be stronger for
German than for US SNS users. Hypothesis 2b: The negative
relationship between perceptions regarding Legal Assurances and
Privacy Concerns will be stronger for German than for US SNS
users. Hypothesis 2c: The positive relationship between
perceptions regarding Legal Assurances and Trust in SNS
Provider will be stronger for German than for US SNS users.
Perceived Control: In the light of privacy discourse, many
authors equate the presence of control with the notion of privacy.
For example, Son and Kim ([45] p. 504) define information
privacy as “individual’s ability to control when, how, and to what
extent his or her personal information is communicated to
others”.
In the context of SNSs, control may take two forms: control over
accessibility of personal information and control over information
use [23]. However, the latter type of control needs is hard to
address under a current revenue model of SNS providers. In fact,
whereas business networks like Xing have long ago introduced
premium accounts to capitalize of the privacy needs of its
members [3], SNS providers offer their users a sole “take-it-or-
leave-it” option when it comes to the use of their personal data.
This lack of flexibility in choosing an appropriate mode of
information secondary use is partly compensated by accessibility
control options, which give users the possibility to protect their
information from the prying eyes of third parties and other users.
We therefore concentrate on this form of control to fulfil the
purposes of our study.
Overall, Pavlou and Gefen [36] argue that market-driven
mechanisms, like control, are powerful means to ensure desired
organizational outcomes. Indeed, empowering users with refined
and easy-to-understand privacy settings is likely to support their
beliefs that SNS provider is acting in their best interests thereby
providing basis for trust. Indeed, investigating user behaviour on
FB, Krasnova et al. [23] show that perceptions of control lead to
enhanced trusting beliefs and reduced privacy concerns on the
network. Moreover, users are even willing to pay significant sums
of money to have more refined control over accessibility of their
information on SNSs [21]. Overall, adjusting profile visibility
constitutes a central strategy when it comes to resolving a
conflicting pressure between the desire to self-present and the
need to keep one’s information private [48]. We assume that by
actively defining the accessibility of their information to the
outside world, SNS users are likely to feel themselves in the
driver’s seat when it comes to managing their privacy. These
feelings are likely to lessen individual perceptions of riskiness of
the SNS experience as well as contribute to the development of
more positive attitudes towards the network, including platform
enjoyment.
Taken together, studies from various contexts underscore the role
of control in mitigating user privacy concerns, ensuring trust and
enabling desired outcomes. However, even though the need to
control one’s outcomes is likely to be universal across cultures,
we expect significant differences in the weight and consequences
different cultures associate with it.
The role of control as an intercultural phenomenon has been
intensively discussed in the context of organizational fairness. In
these studies control is viewed as a major dimension of
procedural justice and reflects the freedom to voice an opinion
about how one’s personal information will be used [31].
Konovsky [19] argues that cultural individualism may be
influential in determining attitudes to voice. However, empirical
evidence regarding the importance of voice perceptions is
controversial. On the one hand, Leung and Lind [27] find that
people in high-IDV cultures (like USA) show higher preference
for process control as opposed to collectivistic cultures (like
China). The reason for these differences may lie in the inherent
competitiveness of high-IDV cultures. Collectivists, on the other
hand, are more inclined towards harmony and hence attach less
importance to voice in the decision-making process. On the other
hand, some studies find that justice perceptions are equally
important across individualistic and collectivistic cultures [33].
A number of studies support importance of voice in the trust-
building process for countries with high IDV levels. For example,
in an organizational context, Pillai and Williams [38] find that
procedural justice is a more important predictor of trust in the US,
than in Germany. Furthermore, Lim et al. ([28] p. 548) argue that
as individualistic cultures build trust on a calculative basis, they
are more likely to look for cues that indicate opportunism or
trustworthiness of the provider. In this case, available privacy
controls, “vendor's recourse and refund policy and/ or the
existence of third-party certifications, such as eTrust, BBB
Online” may provide such assurances. Furthermore, Dinev et al.
[7] argue that people in individualistic and masculine societies
will be more willing to depend on a trustee, if appropriate degree
of control is provided. Taken together, if based solely on IDV
dimension, the impact of control on trusting beliefs should be
higher for the USA than for Germany. However, German users
also exhibit high levels of UAI, which makes them particularly
895
aware of possible vulnerability inherent in a trusting relationship.
As a result, German users may be particularly sensitive to the
availability of controls when deciding to intentionally expose
themselves to privacy-related threats. Taken together, the impact
of low IDV on the relationship between control and trust is likely
to be balanced out by high level of UAI in Germany.
When it comes to the link between control and privacy concerns,
UAI is likely to be a dominant factor in determining the strength
of this relationship. Indeed, as people from high-UAI cultures
experience stronger fear for the unknown, they actively seek for
means to relieve this anxiety [15]. Dinev et al. ([7], p. 395) argue
that people in risk-averse cultures would “attempt to control
almost everything in order to avoid the unexpected”. Therefore, it
is conceivable that German SNS users would attach higher
relevance to privacy controls when forming their judgements
about privacy risks.
Whether or not the influence of control on enjoyment will be
stronger in Germany as opposed to the USA is a complex issue.
On the one hand, as collectivists prefer in-group communication,
they are likely to find it more enjoyable when they are sure that
no out-group members have knowledge of it Furthermore,
collectivists are more likely to rely on procedures which retain
inter-personal harmony [33]. In this case privacy settings offer
excellent means to regulate the outgoing information without
offending anyone. Individualists, on the other hand, may enjoy
self-expression beyond their group of friends and hence be more
relaxed in the absence of mechanisms controlling their
information stream. Whether this argument would hold, however,
is debatable. Even though Germany is much more collectivistic
than the USA, its IDV index is much higher than the world
average (67 vs. 43 [14]). Moreover, Lind and Early [29] argue
that even the most individualist people care about group-related
issues.
Taken together, we hypothesize that:
Hypothesis 3a: The positive relationship between Perceived
Control and Enjoyment will not differ significantly for US and
German SNS users. Hypothesis 3b: The negative relationship
between Perceived Control and Privacy Concerns will be
stronger for German than for US SNS users. Hypothesis 3c: The
positive relationship between Perceived Control and Trust in SNS
provider will not differ significantly for US and German SNS
users.
Knowledge: Even when favourable information-handling
practices and controls are in place, users may be unaware of their
existence or content [45]. Many privacy policies are written in a
complicated legalistic language illegible for an ordinary user. In
2006 Acquisti and Gross [1] found that around one third of their
respondents were not aware about searchability control options,
even though they were implemented on FB. Recognizing the
ubiquitous nature of this problem for online companies, Malhotra
et al. [31] acknowledge awareness about information-handling
procedures as the key element of online privacy. In their view,
increasing user awareness is likely to enhance trust and mitigate
privacy concerns.
Even though people are expected to rely on their knowledge to
categorize their experiences as threatening or safe, the role of
knowledge in the context of privacy is ambiguous. For example,
Bonneau and Preibusch [3] develop a game-theoretical model for
the privacy communication game on SNSs. In order to increase
self-disclosure on SN platforms they recommend minimizing
privacy priming for non-fundamentalists by hiding the privacy
policy into the backrooms of SN websites. These privacy policies
should, however, be fair enough to ensure the needs of privacy
fundamentalists are addressed and their complaints prevented.
Even though this approach partly reflects the current behaviour of
many SNS providers, the long-term impact of such strategy is
hard to predict. If a SNS provider avoids directly informing users
about its information-handling practices, the media will do so,
once the network becomes popular. This negative publicity may
lead to undesirable ‘halo’ and ‘sleeper’ effects, under which a
single negative piece of information (often from an untrustworthy
source) spills over to damage the whole image of the provider.
Lacking factual knowledge about privacy practices on their SNS,
users may attribute unjustified level of risk to their self-
disclosures – a highly undesirable development for any SNS
provider. In support of our argument, Krasnova et al. [23] show a
positive impact of awareness of enhancing trust in SNS provider.
Even though ‘notice’ constitutes a basic element of fair
information practices important for both Germany and the USA,
and, hence, is likely to mitigate privacy concerns, enhance trust
and ensure enjoyment in both countries, its impact is likely to be
contingent on culture. Indeed, Doney et al. [9] argue that culture
plays a significant role in how individuals process information
and integrate it into their decision-making process.
Overall, information-based cues may facilitate the trust-building
process for both individualists and collectivists. However,
whereas individualistic cultures may feel more confident in
assessing the cons and pros of the provider’s defection behaviour
(calculative-based thinking), collectivists are likely to have a hard
time assessing the predictability and benevolence of the provider
on the basis of available facts [28]. Even though this argument
speaks for a slightly higher importance of knowledge for US
subjects, studies on the impact of interactional justice - reflective
for the transparency and communication style of the trustee - on
trust reveal no significant differences between individualistic and
collectivistic countries [33]. Moreover, high UAI inherent in
German culture may also intensify the value attached to
knowledge when forming trusting beliefs. By and large, we expect
no major differences in the link between knowledge and trusting
beliefs for US and German subjects.
Similar to perceived control, we expect knowledge to play a more
salient role in mitigating privacy concerns in such highly risk-
averse society as Germany. Indeed, by getting informed about
information-handling procedures, risk-averse SNS users may feel
at least passively in control of their information [31] and hence
perceive much less risk when communicating on the platform.
Finally, Dinev et al. [7] argue that while collectivistic cultures,
like Germany, are more careful in forming their attitudes, people
from individualistic societies, like USA, feel empowered with
knowledge and, hence, form their perceptions (e.g. regarding
enjoyment) more readily. On the other hand, high risk-averseness
in Germany is likely to level up this effect. By and large, we
expect no major differences in the link between knowledge and
enjoyment perceptions of the US and German respondents. Taken
together, we hypothesize that:
896
Hypothesis 4a: The positive relationship between Knowledge and
Enjoyment will not differ significantly for German than for
American SNS users. Hypothesis 4b: The negative relationship
between Knowledge and Privacy Concerns will be stronger for
German than for American SNS users. Hypothesis 4c: The
positive relationship between Knowledge and Trust in SNS
provider will not differ significantly for American and German
SNS users.
5. EMPIRICAL STUDY
5.1 Survey development, design and sampling
Participants from Germany and the USA were recruited by
posting announcements on university mailing lists, campus
bulletin boards and on FB groups throughout Fall 2008 and
Winter 2009. German and American respondents were offered a
reward of EUR5 or $5 respectively. A total of 138 German
subjects and 193 American subjects took part in the survey.
40.6% / 65.3% of the German / US sample were female and
57.2% / 34.2% were male. 85.5%/ 42% of the participants in
Germany/ USA were between 20 and 29 years old. In the USA
51.3% of the participants were between 18 and 20 years of age.
Overall, both samples were dominated by students – an important
group of FB audience. Recognizing some demographic
differences, we consider both samples to be comparable.
A questionnaire was initially developed in English and then
carefully translated into German. English and German versions of
the survey were offered to German residents. Validity of the
translation was ensured as described in [25]. Each construct was
modeled as reflective and measured on a 7-point Likert scale
(unless specified otherwise). We relied on the pre-tested scales
where possible. Scales for Self-Disclosure (SD), Legal Assurance
(LA) and Enjoyment (EN) are partly presented in [22] as well as
[25] and included 6, 3 and 2 items respectively. 5 items for Trust
in SNS Provider (Tr) were adapted from McKnight et al. [32]. 6
items for Privacy Concerns (PC) and 3 items for Perceived
Control (PCtrl) are presented in Krasnova et al. [23]. Items for
Knowledge (KN) were self-developed as shown in Table 1.
Overall, the paper by Krasnova and Veltri [25] provides a good
overview of the scales used in the study.
Table 1. Construct Operationalization
1. I am well-informed about FB privacy policies; I
know exactly: 2. ... how the information I provide on
FB is allowed to be used by other users or companies;
KN
3. ... how the information I provide on FB can and
cannot be used by FB; 4. ...how existing laws regulate
the use of my information on FB.
5.2 Evaluation of the Model
Our model has been tested using the Partial Least Squares
methodology. The reasons for the choice of this approach was the
non-normality of our data as well as a limited size of the German
sample (less than 200 observations), as typically required by
covariance-based methods [5]. Models for both countries were
estimated separately using SmartPLS 2.0.M3 [42]. Measurement
Model (MM) was evaluated in the first step. Parameters for
Indicator Reliability, Composite Reliability (CR) and Average
Variance Extracted (AVE) were assessed to ensure Convergent
Validity. Only 2 items in the German sample had loadings of 0.67
and 0.69, with all other items in both samples exceeding 0.7
threshold [16]. The CR values for all constructs in both models
exceeded the required level of 0.7 [11]. The AVE values for all
measured constructs by far surpassed the threshold level of 0.5
[41]. Finally, Cronbach’s Alpha (CA) – a measure of Internal
Consistency – was higher than a threshold of 0.7 for all constructs
in both models [16]. Taken together, all criteria for Convergent
were met. In the next step, Discriminant Validity was assessed, by
ensuring that the square root of AVE for each construct was
higher than the correlation between this construct and any other
construct in a model [11]. This requirement was fulfilled for all
constructs in both models (all results are available upon request).
Summarizing, the MMs for both countries were well-specified. In
the next step, the Structural Model (SM) was evaluated. We find
that our ‘PC’ variables explain 24.0% and 15.8% of variance in
Self-disclosure in the USA and Germany respectively. As we
aimed to integrate only practice-relevant factors into our model -
possibly omitting such influential variables as expected benefits
of relationship maintenance or self-presentation - this level of
explanatory power is adequate.
data in PLS is still ‘terra incognita’ for most researchers in the
field. As a temporary solution, some relied on a parametric
approaches, disregarding distributional characteristics of their
data (e.g. [18]). In a recent study, Henseler et al. [13] propose a
PLS-MGA procedure, which is free of distributional assumptions.
The accompanying spreadsheet implementation of their solution
is, however, limited to only 100 bootstrap repetitions. As we
intended to use 200 bootstrap repetitions, a testing procedure in
GNU R was implemented, which builds on the spreadsheet
formula but helps to overcome existing limitations [46]. P-values
obtained via our PLS-MGA implementation of Henseler et al.
[13] approach are presented in Table 2. The supported hypotheses
are selected in bold in Table 2. Considering that our study is
exploratory in nature, a significance level of 10% was considered
acceptable. Finally, for the ease of comprehension, our results for
both countries are also sketched in Figures 2 and 3: paths selected
in bold are significant at least on 5%-level; a path selected in
dashed bold is significant on 10%-level.

Table 2. Standardized path coefficients and p-values for MGA

p-value
AÆB Path Coefficient
Hyp. for MGA
GER USA USA/GER
H 1a EN Æ SD 0.139*** 0.268*** 0.176
Figure 2. Results of the Structural Model for the USA.
H 1b PC Æ SD -0.181** 0.032 0.065
H 1c Tr Æ SD 0.070 0.329*** 0.026
H 2a LA Æ EN 0.101 -0.009 0.184
H 2b LAÆ PC -0.245*** -0.175 0.353 1
H 2c LA Æ Tr 0.216*** 0.299*** 0.244
H 3a PCtrl Æ EN 0.022 0.348*** 0.004
H 3b PCtrlÆ PC -0.143*** 0.056 0.063
H 3c PCtrl Æ Tr 0.140*** 0.207*** 0.270
H 4a KN Æ EN -0.206 0.046 0.025 2
H 4b KN Æ PC -0.021 0.066 0.294
H 4c KN Æ Tr -0.079 0.113* 0.059
Significance: * at 10%; ** at 5%; *** at 1% or lower
Figure 3. Results of the Structural Model for Germany.
Next, path coefficients were evaluated based on PLS algorithm. In
line with the accepted practice, significance of path coefficients 6. THEORETICAL FINDINGS
was determined via a bootstrapping procedure by setting the Our results deliver important theoretical insights. First, we find
number of cases equal to sample size and the number of bootstrap that ‘PC’ of US and German subjects is characterized by distinct
repetitions to 200. Results are summarized in Table 2. Finally, cognitive patterns. On the one hand, both cultures appear to be
Multi-Group Analysis (MGA) comparing path coefficients across equally motivated by enjoyment in their decision to self-disclose
two models was conducted. We note that MGA with non-normal (H1a supported). On the other hand, whereas Germans rather
adjust their self-disclosure on the basis of privacy concerns (H1b
1 supported), Americans base their decisions on their perceptions of
Even though the MGA p-value is insignificant, Legal Assurance
the trust in SNS Provider (H1c supported). It appears that privacy-
does not exert a significant impact on Privacy Concerns in the
relevant mechanisms are helpless in ensuring Enjoyment in
USA. We therefore consider H2b to be supported
German culture. At the same time, and contrary to our
2
Even though the difference between path coefficients is expectations, a feeling of being in control emerges as a powerful
significant, Knowledge does not exert a significant impact on booster for enjoyment for the individualistic American
Enjoyment in both USA and Germany. We therefore consider counterparts (H3a rejected). Even though users from both cultures
H4a to be supported. report experiencing enjoyment from communicating with their

897
peers, more individualistic American users may be increasingly mechanisms are culturally-determined and, hence, SNS providers
apprehensive about the opportunistic behaviour of other users. As cannot rely on the success of the “proven” means in ensuring
a result, they are likely to find their SNS experience as more positive outcomes when crossing boundaries, as discussed in the
pleasing once control means are in place. We find remarkable following section.
differences in the formation of privacy concerns. None of the
factors we tested appears to exert an impact on the magnitude of
7. MANAGERIAL IMPLICATIONS
privacy concerns in the USA. Insignificance of legal assurances
Our results provide a starting point for SNS providers who are
may be explained by the autonomous character of individualistic
looking for practical recommendations on their path to
US culture, which speaks against strong reliance on the
internationalization. We find that stimulating enjoyable
government. Germans, on the other hand, are more collectivistic
experiences appears to be an important internationalization
and risk-averse, which may explain their preference for legalistic
strategy. Recognizing that socialization on SNSs typically
remedies (H2b supported). Furthermore, as in the case with
translates into enjoyment, one possibility is to open up as many
enjoyment, insignificance of legal assurances in mitigating
channels of active communication and passive following as
privacy concerns may be explained by the relative unimportance
possible. Even though FB probably had exactly the same idea
of institutional privacy as opposed to social privacy for US
when introducing News Feed, may users find it useless and boring
subjects [39]. A closer look at the answers to “privacy concerns”
due to ineffective information filtering [20]. Hence, there is a
items reveals that US subjects are particularly fearful of losing
pressing need to improve the criteria for the selection of the social
control over their data online, and less so when it comes to
content. Even though trust in SNS provider emerges as a relevant
“behind-closed-doors” commercial processing. Whereas legal
determinant of self-disclosure for US users, a quick look at the
assurances may prevent abuse of personal data by corporations
responses at the item level shows that US (as well as German)
and other legal entities, they are ineffective in preventing the
subjects are at best slightly positive about the trustworthiness of
bullying, ridicule or secret sharing in a social environment. The
FB. Boyd and Hargittai [4] argue that a lot of this distrust comes
same logic may explain the insignificance of knowledge about
from a heated media-driven discussion of inadequate approach of
practices of SNS Provider in mitigating concerns over social
FB in managing user privacy. Amidst these debates, cross-cultural
privacy for US subjects. This, however, does not explain
legal assurances may come as a much-needed help, as
insignificance of knowledge in mitigating privacy concerns of
individualistic cultures are likely to rely on them when
German respondents, who express high anxiety over commercial
determining provider’s losses in case of a broken trust – a
use of their information (H4b rejected). One possible explanation
backbone of calculative trust-building process [9]. Hence, by
may be that as Germans are more distrustful of companies, they
relating information misuse to financial repercussions (e.g.
may not internalize privacy-related claims of geographically
monetary fines in case of a litigation), policy-makers can make
distant FB. While Germans view active control as a salient
the process of calculative thinking more concrete. Finally, user
determinant of their privacy concerns, we find it not relevant
control and involvement into privacy-relevant decisions appears
whatsoever for American subjects (H3b supported). On the one
to be an indispensible part of the trust-building effort in both
hand, this complete detachment may signal the irrational nature of
Germany and the US. Indeed, in an individualistic culture like the
privacy perceptions of US users. Furthermore, American users
US even rank-and-file members expect to be informed, asked and
may pessimistically (or realistically?!) assess the level of
involved when relevant decisions are made. Our data shows that
protection offered by even most refined controls. They may
self-disclosure decisions of German users are contingent on the
assume that no matter how hard they protect their information, it
magnitude of privacy concerns they perceive. Again, providers
can still be spread if “friends” choose to copy it into a malicious
may mitigate these negative perceptions by giving users more
email. This logic is plausible, as individualism allows for self-
control over their information as well as, paradoxically, by
serving behaviour of others [9]. With an average user having 130
supporting legal enforcement of fair information-handling
FB friends ([10], this arguments may indeed be reflective of the
practices. Other measures, outside of our model, may include
true state of things. In both countries control perceptions and
feedback mechanisms when privacy-relevant decisions are being
legal assurance were equally important in determining trust in
planned. As FB privacy record demonstrates: When user
SNS provider (H3c supported; H2c rejected). This result rejects
involvement in privacy-relevant decisions, even good ones, is
our hypothesis (H2c) about the relative unimportance of legal
missing, the consequences are overblown beliefs of privacy
means in ensuring trust for American vs. German subjects. It is
threats [44]. Altogether our results show that if financial means of
possible that as the legal framework determines the negative side
SNS providers are limited, they should in the first place direct
of the deviant behaviour, American users are likely to integrate it
their investments in enhancing platform enjoyment, granting users
when forming trust on a calculative basis. Finally we find
with more control and, paradoxically, lobbying for more legalistic
knowledge to be insignificant for the formation of trusting beliefs
safeguards of user privacy. Although effects of control differ
for German, and only weakly significant (at 10%-level) for
from country to country, our study shows that control perceptions
American subjects (H4c rejected). As mentioned above, people
influence “disclosure-relevant” constructs in both countries:
from individualistic cultures are more proficient in aligning their
privacy concerns in Germany as well as trusting beliefs and
behaviour with available cues. At the same time, socially and
enjoyment in the USA. We note that even though increasing user
geographically-distant German users may find it difficult to
knowledge regarding privacy issues maybe a good idea
collect evidence relevant for the development of prediction-based
(significant at 10% level in the USA), it should not be the first
trust, which is typical for collectivistic cultures [9]. Taken
priority of SNS providers when expanding internationally. On the
together, results of our study provide a unique theoretical insight
policy side, our study reveals a paramount role of global
into the cross-cultural generalizability of the ‘PC’ theory. Distinct
institutional assurances in enhancing platform trust in both
differences identified in our study signal that many privacy-

898
countries, as well as in mitigating privacy concerns in Germany.
So far limited, more regulation is likely to follow shortly as
announced by the EU Justice Commissioner in January 2010 [37].
We argue that SNS providers should welcome these efforts as
they are likely to motivate communication on their sites. Taken
together, our results call for greater involvement of policy-makers
in safeguarding user privacy. By taking a more active stance,
politicians could help retain the unique potential of SNSs to create
and maintain social capital.
8. CONCLUSION
The aim of this paper was to investigate intercultural dynamics
behind ‘PC’ on SNSs. Using samples from Germany and the
USA, major culturally-determined differences were discovered.
Our results provide evidence that while some elements, such as
enjoyment, are equally important across cultures, relevance of
other constructs varies from country to country. For example,
while Americans base their self-disclosure decisions on the basis
of trust, Germans are driven by privacy concerns. Furthermore,
even though control and legal assurances are important in both
countries, the mechanisms of their integration into individual
privacy decisions are distinct. These differences signal that SNS
provider should adopt more flexible strategies when expanding
internationally. From the policy perspective, our findings support
legal intervention into privacy regulation on SNSs, as besides
protecting users these measures are likely to help SNS providers
in supporting sustainability of their networks. Our study suffers
from several limitations, which, however, offer exciting venues
for future research. First, both American and German samples
were dominated by students. Even though student samples are
acceptable when the research question is “universalistic” in nature
and involves general psychological constructs [26], we encourage
validation of our findings on the basis of more representative
samples. Second, by adopting a ‘PC’ lens we assume that SNS
users have a stable preference for privacy. John et al. [17],
however, argue that privacy preferences are context-dependent
and a behavioural perspective would be more appropriate when
studying privacy-related decisions. Hence, future researchers may
extend our study by accounting for these cognitive limitations.
Finally, as our study was exploratory in nature, it was expected
that while many of the culture-relevant hypotheses would get
supported, some would not. In this respect, our analysis provides
evidence for the complexity of cultural impact on privacy-
relevant perceptions and behaviour.
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